Explanation of Fees


Buying a home involves a number of expenses, from inspection fees to earnest money to closing costs. Here is a checklist of just some of the typical costs involved with closing a new home purchase.


Inspection fees:

Paid to a licensed inspector for inspecting your property for defects, potential problem spots and needed repairs prior to the final sale. Paid at the time of the inspection, not at closing.

Homeowner's insurance:
Must be purchased prior to closing. Insurance companies typically charge the first year's premium up-front. If an escrow account is established with the lender, subsequent premiums are then factored into your monthly mortgage payments.

Loan origination fee:
Paid to the lender to cover the expenses incurred in processing and providing the loan.

Appraisal fee:
Paid to an appraiser for appraising the value of the property, in conjunction with the mortgage application process.

Credit report:
Paid to a credit bureau on behalf of your lender to obtain a copy of your credit report to help determine your credit worthiness.

Flood Zone Determination fee:
Paid to determine whether or not your property lies within a flood zone.

Commitment fee:
Paid to the lender as part of the mortgage approval process.

Prepaid interest:
Paid to the lender to cover any interest on the loan from the closing date to the beginning of the next calendar month.

Property taxes:
Paid to the city and/or county, but only if taxes are due and unpaid at the time of closing. Otherwise, the taxes are prorated, and the amount the seller owes is deducted from the seller's proceeds and credited to the purchaser to cover the tax bill when it comes due. If an escrow account is established with the lender, subsequent property tax costs will be factored into your monthly mortgage payments.

Closing fee:
Paid to the closing agent to cover the costs involved with closing on the property.

Abstract/Title search, Title examination:
Paid to a title or abstract company for researching your title's history.

Title insurance:
Paid to a title company to cover the lender's policy. An owner's policy will be made available to you, as well, at the time of closing.

Fee Schedule:
A list of the title and closing-related services we provide, complete with our costs for each.